BART riders take the San Francisco bound trains as their only alternative after a track fire near Oakland Coliseum station closed routes to Fremont and Dublin/Pleasanton. 2/22/07. Mike Kepka / The Chronicle

Four years ago, BART contract negotiations came down to the wire, as workers prepared to strike. But about an hour before the threatened shutdown, the rail agency's labor unions and management brokered a predawn deal that dodged a commuters' nightmare.

Those hard-fought contracts expire at the end of the month, and BART bosses and its unions are engaged in increasingly acidic negotiations to hammer out new pacts.

Neither side has ruled out the prospect of a strike.

It would be the fourth work stoppage in BART's 37-year history. The last one, in 1997, sent BART regulars scrambling for alternative ways to get to work, gripping the Bay Bridge and Bay Area freeways in gridlock.

Today, the agency, which operates in Alameda, Contra Costa, San Mateo and San Francisco counties, carries 355,000 passengers on a typical weekday - about 85,000 more boardings than a dozen years ago.

"A walkout or lockout would do great damage to the region, causing serious disruptions," said former San Francisco Mayor Willie Brown, who, with other political leaders, intervened in the contract battle eight years ago to help avert a strike. "These are very tough economic times and no one wants to give up anything, but everyone will have to give up something."

The negotiations come as BART, like transit agencies nationwide, is getting hammered by the lousy economy. Faced with significant cuts in state aid and falling tax revenue, operators have been cutting service, raising fares and laying off workers, or a combination of the three.

Higher fares, less service

BART riders face fare increases on July 1, followed by service reductions in September. Those measures are unpopular with the public and have been highlighted by BART officials as they push for union givebacks.

"If long-term changes to the benefit levels are not addressed during labor negotiations, additional cost savings through actions such as service cuts and staff reductions will be necessary," said BART General Manager Dorothy Dugger.

The district's operating budget for the fiscal year beginning July 1 is $642 million. But it has a projected operating shortfall of $250 million over the next four years. Management hopes to slice $100 million from the deficit by cutting labor costs.

The proposed savings would come by diminishing health care and pension benefits and changing work rules that would give management more say over employee assignments - measures BART officials say are necessitated by the economic conditions.

Unions blame managers

Jim Wunderman, president and CEO of the Bay Area Council, a business-backed think tank, said the strategy makes sense. "There simply is not enough money to run BART the way it's been run in the past. It has to evolve. There's no time like the present."

For their part, the unions have been showcasing what they view as excessive and wasteful spending: high executive salaries and bonuses, and tens of thousands of dollars of expenditures on catering, promotional items, labor consultants, clothing and other items they view as nonessential.

They also fault BART for supporting expansion projects - most notably the proposed Oakland Airport Connector - that they say would diminish existing service.

"We think that if BART management made better choices with how they spend taxpayer and riders' dollars, there would be no need for employees or passengers to suffer," said Jean Hamilton, president of the BART chapter of the American Federation of State, County and Municipal Employees.

Bosses reject extension

The union representing train operators and station agents proposed a one-year contract extension - with a freeze on benefits and wages - to see whether the economy picks up before locking in another four-year contract that could undercut gains labor made in years past.

Union leaders now are calling for more time at the bargaining table. But that, too, has been snubbed by management. The elected BART board sent a letter to Gov. Arnold Schwarzenegger asking him not to impose a cooling-off period. Any delay, Dugger said, would cost the district money.

Management also fears that if contract talks were delayed, the negotiations could bleed into the Labor Day weekend, when the Bay Bridge is scheduled to be shut down for four days of seismic work. A BART strike then would cripple the Bay Area's transportation network.

Crafting a strike plan

Union leaders worry that if new contracts are not cemented by July 1, management would impose work-rule changes and takeaways unilaterally. That, they said, would elevate the chance of a strike.

As the deadline nears, the Metropolitan Transportation Commission, a regional planning body, is working with Caltrans and transit agencies, including AC Transit and East Bay ferry operators, to craft plans should a strike occur. Plans also are in the works to encourage employers to allow their workers to telecommute or to vary their work schedules to keep as many cars off the roads as possible during peak commute hours. Ramped-up use of casual carpools also is expected.

Joel Keller, a BART director for the past 15 years who has been through one strike and lived under the threat of two others in 2001 and 2005, said the period leading up to the June 30 deadline will be tense, with a lot at stake.

"I'm hopeful that as both sides maneuver and bargain, they'll find a way to settle their differences," he said. "It's probably going to come down to the last half hour."